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Symposium 2013

Proposal - The three dimensions of sustainable consumption

The Challenge

A growing world population and increasing living standards imply large and accelerating resource use for individual consumption. The world’s population already consumes many of the planet’s resour ...

A growing world population and increasing living standards imply large and accelerating resource use for individual consumption. The world’s population already consumes many of the planet’s resources in unsustainable ways. It seems that economic progress in developing countries will also follow this pattern. A remedy may lie in more conscious behavior by consumers: sustainable consumption.

Sustainability is a complex issue. It encompasses ecologic aspects of human activity – most looked at usually – but also social and economic aspects. Much has been said about the unsustainability of the use of non-renewable resources and some panelists have also stressed the fact that renewable resources can also be used in an unsustainable way. I want to stress the economic and social aspect of sustainable consumption.

The lack of social sustainability of consumption easily comes to mind by recollecting some of the events in the recent past. The global market for textiles is a highly competitive one and it is one in which unacceptable working conditions often provide the competitive edge. The recent events in Bangladesh are a showcase for this. The problem is: a consumer does not know whether a certain product is produced under socially sustainable conditions or not. This is, of course, not only true textiles but also for many other products that reach the consumer after having passed a long and global value chain. Food products, computers, and smart phones have also been in the headlines of newspapers and have been attacked by NGOs for socially unacceptable working conditions. Fortunately, there are already first attempts to change this situation. Some labels such as the Fair Trade Label provide information to consumers about the social conditions under which a product has been produced. However, this works only, if the label is known to consumers and if it is credible.

The food industry is increasingly taking into account the need to control the value chain with respect to its social and ecologic impact. Several companies such as Nestle or Unilever with its SAC (“Sustainable Agriculture Code”) have started to set up systems for making life cycle assessments of their products. These activities have two objectives: they create transparency for the company about the sustainability or unsustainability of its value chain, and it hopefully creates information for consumers thus enabling them to have a choice between more or less sustainable consumption decisions. At the very end the consumer decides. If she is sufficiently informed it will be an educated decision compared to an otherwise uniformed one.

As one goes into the details of life cycle controls and the role they can play for informing consumers things become difficult. Certification and labeling of the whole value chain of consumer goods is one way to overcome the regulatory difficulties of controlling complex global value chains. The chances that governments around the world can agree on such a regulation are very slim. On the other hand, if companies introduce their own certification and labeling schemes two problems arise: Suppliers from farmers to processors and so on would face numerous systems with different requirements which they need to obey; and consumers will be confronted with a large number of labels where it will be difficult to assess their credibility and quality. Already today there are so many labels in the different markets that one can doubt their informational value.

How can we move towards more sustainable consumption? First of all, give consumers sufficient information that allows them to choose a sustainable consumption profile. This could be done through the labeling of products since the price alone does not indicate sustainability. How could labels be managed such that they can play their role as an informational tool? The certification of value chains should be done by independent institutions, not by the companies themselves, in order to maintain credibility. A benchmarking of certification schemes by the companies that want to achieve a sustainable value chain would reduce the complexity for suppliers in the value chain in terms of proving their sustainability. Such certification is already in place for biofuels and much can be learned from the good and bad experiences.

Let me turn to economic sustainability. This is predominantly a medium to long term issue since in the short run economic sustainability is not much different from profitability. Today, the global value chains often rely on the exploitation of huge differences in wages between developing and developed countries. This is not sustainable for economic but also for ethical reasons. We observe – especially in Asia and South America – rising per capita incomes which reduce the differences in wage costs. These effects are already visible between emerging economies when production facilities migrate from countries where wages have risen in the past to countries with still low wage levels. This process is likely to continue and this is a good thing from an ethical point of view as well: Reaching the Millennium Development Goals requires a convergence of incomes. The consequence will be that our western consumption pattern with low priced imported goods – for example textiles, shoes, or electronic articles whose production has virtually disappeared in Europe or the USA – cannot be sustained.

This situation will automatically change as the prices of today will rise in the future with rising incomes in the low-cost producing countries. As a consequence, the throw-away habit where it is cheaper to buy a new product instead of repairing it will slowly disappear. This process can be supported to some extent by the business community through redesigning products such that they can last longer and become more repair friendly. This would also support a more sustainable use of natural resources. Social sustainability requirements would also help to accelerate the process of paying adequate wages and implementing safe working conditions in the low-cost producing countries. Again, certification and labeling can help to support this process.

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